Ofgem and the Department for Energy Security and Net Zero, have published a joint consultation, seeking views on the consumer protection requirements that heat network operators and suppliers will need to comply with, as part of the regulatory framework.
We are also seeking views on Ofgem’s approach to regulating the sector, including through guidance, market monitoring, compliance, and enforcement activity, as well as its approach to recovering the costs of regulating heat networks.
The consultation, including details on how to respond, can be found on the Government’s website.
We will also be holding a series of workshops on the areas covered in the consultation, and will be advertising details for these shortly.
If you would like any more information, please email heatnetworks@energysecurity.gov.uk and heatnetworksregulation@ofgem.gov.uk.
Workshops
Ofgem and the Department for Energy Security and Net Zero's heat network regulation team are holding a series of workshops to support the development of heat networks regulation. The workshops are designed to provide stakeholders with a greater understanding of our policy proposals and offer them the opportunity to seek clarification about aspects of our plans in advance of their consultation response. The workshops will cover key areas such as pricing; scope and definitions; compliance, audit and monitoring; and vulnerability.
Please see the full list of workshops and links to register in the table below.
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Session
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Focus
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Date
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Registration link
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Authorisation and definitions
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The focus of this session will be on scope, definitions and regulatory capture. This will include discussions of what is defined as a heat network (including our proposed approach to very small property conversions), who is captured, responsibilities for suppliers and operators, and how the authorisation process will operate for your network.
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13 September 2023
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Authorisations and Definitions
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Pricing
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In this session we will unpack the pricing transparency, cost allocation, benchmarking, pricing investigations proposals outlined in the consultation document.
We will also offer and welcome your participation in further bilateral discussions.
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14 September 2023
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Pricing
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Quality of Service: Guaranteed Standards of
Performance and complaints handling
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Here we will set out the proposals outlined in the consultation document relating to Guaranteed Standards of Performance and Complaints Handling.
The session will feature breakout groups to understand more about:
- Current practice and policies in the sector regarding interruptions and compensation (beyond those published by the Heat Trust).
- Current practices and policies in the sector regarding complaints handling
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19 September 2023
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Quality of Service: Guaranteed Standards of Performance and Complaints Handling
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Consumers, vulnerability and debt
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To set out our standards of conduct, payment difficult, additional support/Priority Services Register, and prepayment proposals. The session will feature breakout groups to understand more about current practice and policies in the sector regarding payment difficulty and disconnections. We are keen to explore what already exists in the sector and understand more about prepayment meter use and protections networks already employ where they are installed.
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21 September 2023
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Consumers, vulnerability and debt
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Compliance, Audit, Monitoring, and enforcement
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The purpose of this session is to discuss:
- Compliance approaches and what that means for different types of heat networks
- Monitoring, including the metrics we are proposing to be reported, how often Ofgem will require information, and heat networks' ability to get information from internal or external sources. We are also looking to unpack areas and data sets which small heat networks may struggle to provide.
- Audits, including what these might look like across different heat networks types and sizes. How onerous is it for a network to accommodate an audit?
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28 September 2023
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Compliance, Audit, Monitoring, and Enforcement
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Step-in
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We will be focussing on the questions included in the Market Led Step In section of the consultation, and seeking stakeholders input on the following areas.
- Existing Step In arrangements and obligations within the sector, and introduction of contractual Step In requirements. We want to understand existing practice within the sector, and awareness of current obligations. We also want to explore the potential impacts of strengthening contractual Step In arrangements through making this an authorisation condition.
- Customer Supply Continuity Plans - We're keen to get input on what should be included, and how prescriptive we should be on the content on CSCPs. We're also keen to gather views on approaches to monitoring compliance, and whether there should be differing requirements depending on the characteristics of the networks.
- Financial resilience and control over material assets - We want to see a responsible approach to risk management, and a financially resilient sector. We're keen to get views on the conditions we propose to drive these outcomes, and the areas we should focus our monitoring on.
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6 October 2023
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Step-in
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Managing agents and Right To Manage companies
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This will be a discussion with and input from managing agents and Right to Manage companies on what the rules proposed in the consultation mean for them. Breakout groups will be organised to discuss intersects with existing leasehold rules.
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10 October 2023
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Managing agents and Right To Manage companies
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